Buster Company. Sells radios for $30 each. Fixed expenses total $15,000. Variable expenses are $20 per unit. What total dollar amount must Buster company sell to break even? a $20,000 b. $37,500 c. $45,000 d $60,000 JoJo Company is considering a new product, Pear. JoJo fixed costs are $200,000. Pear's contribution margin is $200 per unit. JoJo has a marginal tax rate of 25%. How many units of Pear would JoJo Company have to sell to have after-tax net income of $1,000,000 a. 2,250 units b. 4,750 units c. 5,000 units d. 7,667 units During May, KIA Co. produced and sold 10,000 units of a product. Manufacturing and selling costs incurred during May were as follows: Direct materials and direct labor $200,000 Variable manufacturing overhead $45,000 Fixed manufacturing overhead $10,000 Variable selling costs $5,000 The product's unit cost under direct (variable) costing was a. $24.50 b. $25.00 c. $25.50 d. $26.00 Which of the following is a problem with the ROI calculation? A. Increased profits cause ROI to decrease. B. Investment in assets is measured using current value costs. C. An undue emphasis on ROI may lead managers to delay the purchase of modern equipment needed to stay competitive. D. It does not hold managers responsible for assets. LaLa Company currently has 100,000 shares of common stock outstanding and a price-earnings ratio of seven. Net income for the recently ended year is $375,000.LaLa board of directors declared a 15-for-2 stock split. Sunshine owned 100 shares of LaLa company before the split. What is the approximate value of Sunshine's investment in LaLa immediately after the split a. $ 26 b. $ 350 c. $2,625 d. $5,250 Lela Company purchases all of the outstanding shares of another company. The acquiring company incurs the following costs to make this purchase: $300,000 to outside accountants and attorneys as direct consolidation costs, $200,000 as a reasonable allocation of internal costs attributed to this purchase, $120,000 in stock issuance costs in connection with shares issued by the acquiring company to the owners of the acquired company. What amount of these costs should be expensed immediately as incurred? Zero $200,000 $500,000 $620,000 On November 1, Year One, the Haynie Company signs a contract to receive one million Japanese yen on February 1, Year Two, for $10,000 based on the three-month forward exchange rate at that time of $1 for 100 Japanese yen (1,000,000 x 1/100 or $10,000). This contract is a derivative because its value is derived from the future value of the Japanese yen in relation to the US dollar. On December 31, Year One, the Haynie Company is producing financial statements. How is this forward exchange contract reported? It is shown as an asset or a liability at its fair value. It is shown only as an asset at its fair value. It is shown only as a liability at its fair value. It is only disclosed in the notes to the financial statements because it is a future transaction. B Company buys 80 percent of the outstanding shares of Little Company on January 1, Year One. Big paid an amount that was in excess of the underlying fair value of the subsidiary's assets and liabilities so that this was not viewed as a bargain purchase. On that date, Little held equipment worth $300,000 but with a net book value of $200,000. This equipment had a ten-year remaining life with no expected residual value. One year later, when Little still held this equipment as well as other, newly-bought pieces, Big reported a net account of $900,000 and Little reported a net account of $500,000. Assume no asset impairments have taken place. What is the consolidated balance to be reported for equipment? $1,472,000 $1,480,000 $1,490,000 $1,500,000 On November 1, Year One, the ABC Company signs a forward exchange contract to receive one million Japanese yen on February 1, Year Two, for $10,000 based on the three-month forward exchange rate at that time of $1 for 100 Japanese yen (1,000,000 x 1/100 or $10,000). On that same day, ABC company agrees to acquire inventory for one million yen when it is delivered on February 1, Year Two. The forward exchange receivable is designated as a hedge for this commitment. On November 1, the spot (current) exchange rate is $1 for 94 Japanese yen but that rate change, by December 31, to $1 for 96 Japanese yen. As of December 31, Year One, the forward exchange rate to be paid one month in the future is $1 for 103 Japanese yen. What is the overall impact to be recognized on NET INCOME at the end of Year On 0 $71 loss $221 gain $292 loss one is left i will post last one in few min Big Company buys 80 percent of the outstanding shares of Little Company on January 1, Year One. Big paid an amount that was in excess of the underlying fair value of the subsidiary's assets and liabilities so that this was not viewed as a bargain purchase. On that date, Little had land worth $500,000 but with a book value of $300,000. Several years later, when Little still held this land as well as other parcels of land, Big reported a Land account of $1.1 million and Little reported a Land account of $700,000. Assume no asset impairments have taken place. What is the consolidated balance to be reported for land? $1.66 million $1.82 million $1.96 million $2.00 million On January 1, Year One, Big Company acquires 100 percent of the outstanding shares of Small Company by issuing its own stock worth $12 million. The shares of Small had been worth only $11 million in the period leading up to the acquisition but Big had to pay a premium in order to obtain all of the stock. Big paid an additional $200,000 in cash to attorneys as direct consolidation costs and another $150,000 in stock issuance costs. According to US GAAP, what should be the basis for reporting the assets and liabilities of Small within consolidated financial statements created on the date of acquisition $11,350,000 $12,000,000 $12,200,000 $12,350,000 On December 1, Year One, a company acquires two three-month financial instruments that qualify as derivatives. Financial instrument A was bought to serve as a fair value hedge. Financial instrument B was bought to serve as a cash flow hedge. By the end of Year One, both of these financial instruments have increased in value by $1,000. How should these gains in value be reported by the company on the Year One financial statements? Both gains are reported within net income. Both gains are reported within accumulated other comprehensive income. The gain on the fair value hedge is reported within net income whereas the gain on the cash flow hedge is reported within accumulated other comprehensive income. The gain on the fair value hedge is reported within accumulated other comprehensive income whereas the gain on the cash flow hedge is reported within net income.
Paper#6810 | Written in 18-Jul-2015Price : $25